If you are planning to start a restaurant in the US, you will typically focus on things like the menu, location, décor, POS system, etc., that are within your control. However, certain aspects may prove to be a logistical hurdle, such as obtaining the necessary licenses and permits to start a restaurant.
The number of licenses and permits required depends on the type of establishment you are opening and its location. The task of obtaining the permits and licenses can be taxing, but the good news is that this article will help you know the process of acquiring some of the most important ones that you will require to start a restaurant in the US.
Business License
It is a permit issued by the US government to allow companies to conduct their business legally within a particular geographic jurisdiction, which could either be a city or a state. In the US, the process of obtaining a business license differs depending on your restaurant’s location. You must obtain the permit in the city where your restaurant is located.
The state- or city-specific rules for getting a business license can be retrieved from the US Small Business Administration’s (SBA) website. The cost of obtaining a business license can vary depending on the city and the state, though it is mostly ~$50 per application. Additionally, other costs associated with acquiring the license can fall between $25 and $7,000.
Food Service License
Given that a restaurant’s core business is serving food, it will need a food service license. In many US states, the type of food license is determined by the type of establishment you will be operating. For instance, a food truck may require a food vendor’s license instead of a food service license in some states. So, you need to check precisely what type of food license you require based on your restaurant type.
The state health department issues a food service license. So, start by checking the state-specific requirements at the US Food and Drug Administration (USFDA) and complete the food license application accordingly. After application, a health department personnel will visit your restaurant to ensure that the place complies with the restaurant food safety regulations. The cost of foodservice depends on the restaurant’s location, type, and size. On average, the cost of the license will fall in the range between $100 to $1,000, depending on the state.
Liquor License
The food service license doesn’t include the liquor service. So, if you intend to serve alcohol, you need to obtain a liquor license, or otherwise, you will be burdened with fines, penalties, and the risk of permanent closure. Typically, a liquor license requires some time as it involves different levels of licenses. So, start the processing at the earliest possible time if you intend to serve alcohol at your restaurant from the very first day.
There are various types of liquor licenses, which depend on the kind of liquor you intend to serve (beer and wine only, full bar, etc.) and the location. The sale of alcohol in a state is regulated by its Alcohol Beverage Control (ABC) Board, and this is where the process starts. So, contact the state’s ABC Board to discuss the state’s laws and decide the type of liquor license required for your establishment.
Food Handler’s Permit
This permit validates that your restaurant’s staff has successfully completed the food safety certification, which indicates that the staff knows about the regulations pertaining to food sanitation, storage, protection, and preparation. You can obtain it easily, but each staff member needs to apply for this permit individually. This permit is also popularly known as Employee Health Permit.
The requirements and validity of this permit and the courses for the associated certification vary across states. You need to check with the Department of Health to determine the state-specific requirements. Depending on your restaurant’s location, the cost of a Food Handler’s License can vary between $10 to $600.
Employer Identification Number (EIN)
Although EIN isn’t a license or permit per se, it is required if you want to apply for any permit, license, or file any other paperwork within the state. The EIN is assigned by the Internal Revenue Service (IRS), and it is basically a tax ID number or rather a restaurant’s social security number.
Live Entertainment And Music License
If you plan to play music in your restaurant, you need to apply for a license from performance rights organizations, such as ASCAP, BMI, or SESAC. This license helps in avoiding copyright infringement. This license can cost somewhere between $250 to $500. The rates may vary depending on various factors, like whether the music is played live or recorded, the number of music nights per week, etc. If you are caught playing copyrighted music without a license, then it may cost somewhere in the range of $750 to $30,000 in the form of penalties.
Other Permits To Start A Restaurant In The USA
Apart from the six critical permits and licenses discussed above, you also need to obtain other restaurant licenses to help you run the restaurant legally. The additional restaurant licenses include Sign Permit, Certificate Of Occupancy, Resale Permit, Pool Table License, Dumpster Placement Permit, Sales Tax Permit, Building Health Permit, and Valet Parking Permit.
So, you need to ensure that either you have the licenses mentioned above in place or apply for them before/while starting your restaurant. If you have the licenses, you can run the restaurant business in the US with ease. If you still have queries or doubts, then get in touch with a knowledgeable professional from this domain. Once all the licenses and permits are obtained, you know that you are on the right track to realize your dream of a thriving restaurant business.
